European car sales hit September record

MILAN (AP) — Europe's car industry continues to rebound from its longest-ever slump, posting 7 percent growth in September to reach the highest level on record for the month, according to new figures released Friday.

Italy and Spain significantly outpaced the market, contributing double-digit growth as sales in the European Union reached a September record of 1.45 million units, the European manufacturers' body, ACEA, said.

Still, the three-year growth streak has not yet returned the overall market to pre-crisis levels, which peaked at nearly 16 million units in 2007 before dropping by a quarter over six years.

New car registrations over the first nine months of the year rose 8 percent to 11.2 million units with growth in the big five markets of Italy, Spain, Germany, France and Britain. ACEA has forecast sales to reach around 14 million this year.

IHS Markit analyst Ian Fletcher called the result "a return to normality" but noted that growth was driven by fleet registrations "and not all of it natural corporate demand." IHS forecasts full-year sales at 14.757 million units, before flattening next year at around 14.59 million.

Mass market carmakers Fiat Chrysler and Renault posted steep double-digit gains, along with premium brands Daimler and BMW. Volkswagen, still under fire from an emissions scandal, grew by a mere 5 percent, and PSA Peugeot slid by 5.2 percent, with all the group brands dipping. IHS said new model launches are likely to help PSA in future months.

The 17-percent surge in Italian new car registrations was supported by leasing and fleet sales, which the government has favored in a recent budget law giving tax breaks on big-ticket items to companies and small businesses. As a result, leasing rose by 26 percent and fleet sales by nearly half, according to Italy's car association. Fiat Chrysler sales outpaced even the bull market at 21 percent, led by premium brand Alfa Romeo and Jeep.

In Spain, a strong summer tourist season buoyed sales to rental car companies by 60 percent, even if in absolute terms private buyers sustained the market, growing by 9 percent to more than 46,500 units, followed by company car sales of 28,387.